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2021 (12) TMI 33 - AAR - GSTRequirement of obtaining HSN Codes at the time of obtaining registration - composition levy under sub-sections (1) and (2) of section 10 - person engaged in Pan Masala and Tobacco products Trading - applicable tax rate on the supply of such Pan Masala or Tobacco products - applicability of tax rate prescribed under Notification No. 50/2020 - HELD THAT:- The provisions relating to Composition. as contained in Section 10 of the GST Act, 2017 contains certain conditions, the presence of which excludes a person from taking the benefit of this scheme of Composition. One such conditions is given in Section 10(2)(b) which states that the benefit of this scheme shall not be available to a person who is engaged in the supply of goods that are not leviable to tax under this Act - As per explanation (ii) to Notification No. 14/2019 - CT. the rules for the interpretation of the First Schedule to the said Customs Tariff Act. 1975 (51 of 19751. including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. The list of goods to he sold from the Pan shop include all kinds of goods that are normally bought from a Pan Shop. Accordingly, one of the goods that shall be sold from the applicant's Pan Shop is Gutka, containing Tobacco or otherwise. The Gukta is a preparation of betel nuts and any one or more of lime, katha (catechu) and tobacco whether or not containing any other ingredient, such as cardamom. copra or menthol, which is same as Pan Masala discussed supra. In a Pan shop the seller also generally makes a product akin to Gutka themselves by mixing of betel nuts, lime, kattha and tobacco containing or not containing other ingredients are sold which amounts to manufacture of Gutka. Preparation of Gutka in the Pan Shop is akin to manufacture on account of the process of preparation being that of mixing of different bought out ingredients 4nd the resultant product having a distinct name and use - the preparation of Gutka at the Pan Shop for sale is covered in the Second Proviso of Notification No. 14/2019-CT. In the Table given in Notification No. 14/2019-CT both Pan Masala and goods covered under Chapter 24 are listed as goods for which composition cannot be obtained. The case of the applicant is fully and squarely covered under the restrictive condition of Section 10(2)(b) and 10(2)(e) of the GST Act, 2017.
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